Colucci et al v. ZonePerfect Nutrition Company

Filing 38

Order by Hon. Samuel Conti granting in part and denying in part 26 Motion to Dismiss.(sclc2, COURT STAFF) (Filed on 12/28/2012)

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1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 10 For the Northern District of California United States District Court 9 JAMES COLUCCI and KIMBERLY S. SETHAVANISH, on behalf of themselves and all others similarly situated, 11 Plaintiffs, 12 v. 13 14 ZONEPERFECT NUTRITION COMPANY, a Delaware corporation, 15 Defendant. 16 ) Case No. 12-2907-SC ) ) ORDER RE MOTION TO DISMISS ) ) ) ) ) ) ) ) ) ) ) 17 18 I. INTRODUCTION 19 Plaintiffs James Colucci and Kimberly S. Sethavanish 20 (collectively, "Plaintiffs") bring this purported class action 21 against Defendant ZonePerfect Nutrition Company ("Defendant"), a 22 maker of nutritional snack bars ("nutrition bars"). 23 Plaintiffs' Complaint is that Defendant's nutrition bars, which 24 bear on their labels the statement "All-Natural Nutrition Bars," 25 are not all-natural and hence misleadingly labeled. 26 before the Court is Defendant's fully-briefed motion to dismiss the 27 Complaint. 28 motion is suitable for decision without oral argument. The thrust of Now pending ECF Nos. 26 ("Mot."), 31 ("Opp'n"), 32 ("Reply"). The Civ. L.R. 1 7-1(b). For the reasons set forth below, Defendant's motion to 2 dismiss is GRANTED IN PART and DENIED IN PART. 3 4 II. BACKGROUND 5 A. Procedural History 6 On September 14, 2011, months before Plaintiffs filed the 7 instant case, they filed a separate lawsuit against Defendant in 8 this Court, with the case number 11-cv-4561-SC. 9 for dismissal on February 10, 2012. Defendant moved Plaintiffs responded by filing United States District Court For the Northern District of California 10 an amended complaint on March 2, 2012. On March 30, 2012, 11 Defendant moved again for dismissal. 12 motion and, on April 27, 2012, filed a notice of voluntary 13 dismissal. Plaintiffs did not oppose the On May 1, 2012, the Court dismissed the case. On April 26, 2012, Plaintiffs had filed a new case against 14 15 Defendant, this time in the California Superior Court for Sonoma 16 County. 17 The Complaint sets forth eight causes of action: (1) violation of a 18 written warranty under the Magnuson-Moss Warranty Act, 15 U.S.C. § 19 2301 et seq. ("MMWA"); (2) common-law fraud; (3-5) claims for 20 unlawful, unfair, and fraudulent business practices under 21 California's Unfair Competition Law, Cal. Bus. & Prof. Code §§ 22 17200 et seq. ("UCL")1; (6) false advertising in violation of 23 California's False Advertising Law, Cal. Bus. & Prof. Code §§ 17500 ECF No. 1 (notice of removal ("NOR") Ex. A ("Compl."). 24 25 26 27 28 1 The UCL "establishes three varieties of unfair competition -acts or practices which are unlawful, or unfair, or fraudulent." Berryman v. Merit Prop. Mgmt., Inc., 152 Cal. App. 4th 1544, 1554 (Cal. Ct. App. 2007). Each "prong" of the UCL thus represents an analytically distinct theory of recovery and imposes different standards. See Boschma v. Home Loan Ctr., Inc., 198 Cal. App. 4th 230, 252-53 (2011) (distinguishing prongs, explaining standards). Here, Plaintiffs assert a separate UCL claim under each prong. 2 1 et seq. ("FAL"); (7) violation of California's Consumers Legal 2 Remedies Act, Cal. Civ. Code §§ 1750 et seq. ("CLRA"); and, in the 3 alternative, (8) restitution based on quasi-contract. 4 Defendant received a copy of the state-court complaint no 5 earlier than May 7, 2012 and removed to this Court on June 5, 2012. 6 NOR ¶ 2.2 7 instant case is related to the earlier, voluntarily dismissed case. 8 ECF No. 19. 9 and the case was transferred to the undersigned. United States District Court For the Northern District of California 10 On June 28, 2012, the parties stipulated that the On July 10, 2012, the Court deemed the cases related ECF No. 23. On July 25, 2012, Defendant filed the instant motion to dismiss. 11 B. 12 In the procedural posture of this case, the Court takes its 13 The Nutrition Bars' Labels and Ingredients account of the facts from the allegations of Plaintiffs' Complaint. Defendant manufactures, distributes, and sells nutrition bars 14 15 through walk-in and online retailers. Compl. ¶ 9. There are 16 twenty varieties of Defendant's nutrition bars, and they are sold 17 and distributed nationwide in grocery stores, health food stores, 18 and other venues. Id. ¶ 10. Plaintiffs include in their Complaint twenty color photographs 19 20 that purport to represent each of the twenty ZonePerfect-brand 21 nutrition bars. 22 brightly-colored, rectangular plastic wrapper emblazoned on the 23 left with (among other things) the ZonePerfect logo and the legend Id. ¶¶ 42(a)-(t). Each photograph shows a 24 25 26 27 28 2 Defendant removed on the basis of this Court's federal-question jurisdiction over Plaintiffs' MMWA claim and its supplemental jurisdiction over Plaintiffs' other seven, state-law claims. NOR ¶¶ 6-8 (citing 28 U.S.C. §§ 1331, 1367(a), 1441(a) & 1446). Having reviewed the NOR, the Court determines that Defendant has satisfied the jurisdictional and procedural requisites of §§ 1441(a) and 1446, respectively. The Court also concludes, as detailed at note 6 infra, that Defendant could have removed on diversity grounds. 3 1 "All-Natural Nutrition Bars," and, on the right, a line of text 2 announcing the bar's flavor (e.g., "Chocolate Mint") situated 3 beneath an image of an unpackaged rectangular food bar flanked by 4 food items representing its flavor (e.g., a sprig of mint leaves 5 and a bowl of chocolate pudding). 6 Plaintiffs allege that all of Defendant's nutrition bars ingredients: ascorbic acid; calcium pantothenate; calcium 9 phosphates; glycerine; potassium carbonate a/k/a "Cocoa [Processed 10 United States District Court contain at least one of the following ten allegedly non-natural 8 For the Northern District of California 7 with Alkali]" or "Cocoa Powder [Processed with Alkali]"; pyridoxine 11 hydrochloride; disodium phosphate; sorbitan monostearate; 12 tocopherols; and xanthan gum. 13 that, although the labels on nutrition bars' packages "did disclose 14 that [the nutrition bars] contained many of [these] synthetic and 15 artificial substances, the labels did not disclose that these 16 ingredients were synthetic or artificial, and in some cases did not 17 identify that these components existed in ZonePerfect's Nutrition 18 Bars at all (e.g., Potassium Carbonate)." 19 20 21 C. Id. ¶¶ 21-30. Plaintiffs allege Id. ¶ 40. Plaintiffs' Purchases of Nutrition Bars and Class Allegations Mr. Colucci and Ms. Sethavanish are engaged but unmarried. 22 See generally id. ¶¶ 7-8. Both have been residents of Windsor, 23 California since December 2010. 24 active-duty member of the United States Marine Corps, stationed at 25 Camp Pendleton in San Diego County, California. 26 lived in Orange, California. 27 2010, Mr. Colucci was deployed as part of his military service. 28 Ms. Sethavanish would send him a monthly care package. Prior to that, Mr. Colucci was an Ms. Sethavanish From September 2009 through April 4 At Mr. 1 Colucci's request, she would include in these care packages "two 2 multi-bar packs of ZonePerfect Nutrition Bars per month, including 3 its Classic ZonePerfect 'All-Natural' Nutrition Bars Chocolate 4 Peanut Butter flavor" (herein, "Chocolate Peanut Butter Bars"). 5 Id. 6 Sethavanish would purchase packs of Chocolate Peanut Butter Bars 7 every four to six weeks from retail stores near her home. See id. Plaintiffs allege that Mr. Colucci believed and relied upon 8 9 Plaintiffs allege that, beginning on September 14, 2007, Ms. the "all-natural" representation on the label of the nutrition bars Id. ¶ 7. United States District Court For the Northern District of California 10 when he asked Ms. Sethavanish to purchase them for him. 11 They further allege that Mr. Colucci would not have asked Ms. 12 Sethavanish to buy, nor would she have agreed to buy, Defendant's 13 nutrition bars had they known the bars were not all-natural. 14 ¶¶ 7-8. 15 either a "truly" all-natural bar or another non-natural bar with a 16 lower price. Id. Instead, they allege, Ms. Sethavanish would have bought Id. 17 Plaintiffs purport to bring this action on behalf of a 18 nationwide class consisting of all persons who purchased any of 19 Defendant's nutrition bars on or after September 14, 2007. 20 ¶ 52. 21 Sethavanish allegedly first purchased nutrition bars for Mr. 22 Colucci. See id. The start of the class period corresponds with the date Ms. Compare id. ¶ 8 with id. ¶ 52. 23 24 III. DISCUSSION 25 A. Standing 26 Defendant challenges Mr. Colucci's constitutional standing to 27 bring any claim regarding Defendant's labeling practices because 28 the Complaint does not allege that Mr. Colucci personally bought 5 1 Defendant's nutrition bars, only that Ms. Sethavanish bought the 2 bars for him. 3 challenges the scope of Ms. Sethavanish's standing, arguing that, 4 while Ms. Sethavanish has standing to sue for mislabeling of the 5 Chocolate Peanut Butter Bars because she alleges that she purchased 6 that type of bar, she does not have standing to sue where the other 7 nineteen varieties of Defendant's nutrition bars are concerned 8 because she does not specifically allege that she purchased those 9 types. Mot. at 5-6; Reply at 6-7. Defendant also Mot. at 6-8; Reply at 7-9. United States District Court For the Northern District of California 10 Article III of the United States Constitution provides that 11 the "judicial power of the United States" extends only to proper 12 "Cases" and "Controversies." 13 from this language limits the federal courts' exercise of the 14 judicial power to those cases brought by plaintiffs who meet 15 certain minimum requirements. 16 750 (1984). 17 18 19 20 21 22 The doctrine of standing which flows See Allen v. Wright, 468 U.S. 737, The irreducible constitutional minimum of Article III standing contains three elements. First, the plaintiff must have suffered an "injury in fact" that is "concrete and particularized" and "actual or imminent." Second, there must be a causal connection between the injury and the conduct complained of, such that the injury is fairly traceable to the action challenged. "Third, it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision. 23 24 Renee v. Duncan, 686 F.3d 1002, 1012 (9th Cir. 2012) (quoting Lujan 25 v. Defenders of Wildlife, 504 U.S. 555, 560 (1992)) (internal 26 quotation marks, brackets, and citations omitted). 27 invoking federal jurisdiction bears the burden of establishing 28 these elements." Lujan, 504 U.S. at 561. 6 "The party Defendant's standing 1 challenge focuses only on the injury-in-fact requirement: Defendant 2 argues that Ms. Sethavanish alleges no injury in fact concerning 3 nutrition bar flavors she did not actually purchase and that Mr. 4 Colucci alleges no injury at all since he does not allege that he, 5 personally, purchased any nutrition bars. 1. 6 Ms. Sethavanish 7 The Complaint alleges that Ms. Sethavanish purchased nutrition 8 bars "including" Chocolate Peanut Butter Bars, but never identifies 9 any other flavor. Compl. ¶ 8. Both parties' moving papers appear United States District Court For the Northern District of California 10 to assume that Ms. Sethavanish bought only that flavor, so the 11 Court assumes the same for purposes of this discussion. 12 Ms. Sethavanish obviously has standing to sue for alleged 13 mislabeling of the Chocolate Peanut Butter Bars that she allegedly 14 purchased. 15 statutory standing requirements imposed by California's UCL are 16 satisfied by allegations that a plaintiff would "not have purchased 17 the products in question had he known the truth about these 18 products and had they been properly labeled in compliance with the 19 labeling regulations" and that he "lost money or property when he 20 purchased the products in question because he did not receive the 21 full value of those products as advertised and labeled due to the 22 alleged misrepresentation." 23 EJD, 2012 WL 5471153, at *6-7 (N.D. Cal. Nov. 9, 2012). 24 does not dispute Ms. Sethavanish's standing as to the Chocolate 25 Peanut Butter Bars she allegedly bought. 26 Both Article III standing requirements and the separate Khasin v. Hershey Co., 5:12-CV-01862 Defendant The issue, rather, is whether Ms. Sethavanish has standing to 27 sue for alleged mislabeling of differently flavored bars that she 28 did not allegedly buy. Defendant argues she does not. 7 Mot. at 6- 1 8; Reply at 7-9. 2 Sethavanish did not buy are similar enough to those she did that 3 this issue is not one of standing, but rather one of whether Ms. 4 Sethavanish can adequately represent the alleged purchaser class -- 5 that is, a question appropriately raised in the context of a Rule 6 23 motion for class certification rather than a Rule 12(b)(1) 7 motion to dismiss for lack of standing. See Opp'n at 6. As Judge Chen of this District recently observed, "there is 8 9 Plaintiffs argue that the nutrition bars Ms. authority going both ways" on this issue. Astiana v. Dreyer's United States District Court For the Northern District of California 10 Grand Ice Cream, Inc., C-11-2910 EMC, 2012 WL 2990766, at *11 (N.D. 11 Cal. July 20, 2012) (Chen, J.). 12 Court agrees with Judge Chen that "the critical inquiry seems to be 13 whether there is sufficient similarity between the products 14 purchased and not purchased." 15 3 16 17 18 19 20 21 22 23 24 25 26 27 28 Reviewing the cases, however, this Id.3 Factors that other courts have It is difficult to identify with certainty how much similarity is required. Courts have denied standing where a wide swath of challenged products were purchased but one challenged product was not. See Larsen v. Trader Joe's Co., C 11-05188 SI, 2012 WL 5458396 (N.D. Cal. June 14, 2012) (denying standing as to unbought crescent rolls where plaintiff allegedly purchased a wide variety of products, including cookies, apple juice, cinnamon rolls, biscuits, and ricotta cheese). Courts also have denied standing as to unbought products that differed from the purchased product in only minor, arguably trivial ways. See Dysthe v. Basic Research LLC, CV 09-8013 AG SSX, 2011 WL 5868307, at *5 (C.D. Cal. June 13, 2011) (denying standing as to an unbought weight-loss pill marketed as "Relacore" where plaintiff bought only "Relacore Extra," which had only minor differences in packaging and ingredients; "[J]ust because an Old Fashioned and a Manhattan both have bourbon doesn't mean they're the same drink."). But courts have also found standing as to unbought products that differed only trivially from the purchased product, see Dreyer's Grand, 2012 WL 2990766, at *13 (different flavors of the same brand of ice cream bearing the same label), as well as to unbought products that differed fairly substantially, see Koh v. S.C. Johnson & Son, Inc., C-09-00927 RMW, 2010 WL 94265 (N.D. Cal. Jan. 6, 2010) (two cleaning sprays, one a window cleaner and the other carpet stain remover, both with the same allegedly false badge of eco-friendliness). The Court need not reconcile any tension that may exist in the cases, however, because it determines, for the reasons set forth herein, that the challenged products here are sufficiently similar under any test -- 8 1 considered include whether the challenged products are of the same 2 kind, whether they are comprised of largely the same ingredients, 3 and whether each of the challenged products bears the same alleged 4 mislabeling. See Dreyer's Grand, 2012 WL 2990766, at *13. 5 Here, the Court concludes that there is more than enough 6 similarity between the Chocolate Peanut Butter Bars allegedly 7 purchased and the other nineteen varieties of nutrition bars 8 identified in the Complaint. 9 single kind, that is, they are all nutrition bars. The accused products are all of a They share a United States District Court For the Northern District of California 10 uniform size and shape. 11 difference between the bars is their flavor. 12 reveals some difference between the ingredients used in different 13 flavors, but the similarities are more striking: six of the nine 14 challenged ingredients appear in all twenty nutrition bar flavors. 15 See Compl. ¶ 42. 16 same challenged label: "All-Natural Nutrition Bars." 17 On casual inspection, the only obvious Closer inspection Most importantly, all twenty flavors bear the The Court concludes that Ms. Sethavanish has standing for both 18 Article III and UCL purposes to sue for alleged mislabeling of all 19 twenty nutrition bar flavors identified in the Complaint. 2. 20 21 Mr. Colucci The Court concludes that Mr. Colucci lacks standing. As the 22 previous section's discussion suggests, standing in product 23 mislabeling cases is predicated on the purchase of at least some 24 product. 25 26 27 28 See Hershey, 2012 WL 5471153, at *6-7. Here, Plaintiffs more similar than the weight-loss pills in Dysthe and at least as similar as the ice cream brands in Dreyer's Grand. The different flavors of Defendant's nutrition bars are more or less fungible when viewed from the perspective of a consumer considering buying one or the other; any preference for one flavor versus another could rest only on personal idiosyncrasies of taste, diet, or allergy. 9 1 suggest that Mr. Colucci has standing despite the absence of 2 allegations that he personally purchased the products, or even that 3 they were purchased using money in which he had a legal interest 4 (as might have been the case if, for instance, he and Ms. 5 Sethavanish had been married at the time of the purchases rather 6 than engaged). Plaintiffs argue that Mr. Colucci's standing flows from his 7 8 status as the "intended beneficiary" of the purchases. 9 The Court disagrees. Opp'n at 5. Mr. Colucci may have been a beneficiary in a United States District Court For the Northern District of California 10 colloquial sense -- Ms. Sethavanish no doubt meant him to enjoy the 11 snacks she bought for him -- but Plaintiffs' argument misapprehends 12 third-party beneficiary law. 13 on the intent of both parties to a contract. 14 Residential Briarwood Apartments, 171 Cal. App. 4th 1004, 1023 15 (Cal. Ct. App. 2009). 16 intend to benefit the third party, it is required that the promisor 17 understand the promisee -- here, Ms. Sethavanish -- to have such 18 intent. 19 compared to the retailer who actually Ms. Sethavanish the bars), 20 nothing suggests that Defendant knew Ms. Sethavanish intended to 21 benefit Mr. Colucci when she bought the bars or, indeed, knew of 22 Mr. Colucci's existence. 23 beneficiary of the purchases in any legal sense. 24 argument that Mr. Colucci's intended beneficiary status gives him 25 Article III standing falters at the gate.4 26 4 27 28 Id. Third-party beneficiary status turns See Spinks v. Equity While it is not required for both parties to Even assuming that Defendant was the promisor (as Mr. Colucci clearly was not an intended Plaintiffs' The one case Plaintiffs cite in support of their argument, Walters v. Fid. Mortg. of CA, 730 F. Supp. 2d 1185 (E.D. Cal. 2010), is distinguishable. In that case, a plaintiff who claimed third-party beneficiary status alleged that a promisor (Ocwen) knew that two promisees (Fidelity "and/or" HSBC) had "entered one or 10 The Court DISMISSES this action as to Mr. Colucci for lack of 1 2 standing. Because no amendment consistent with the current 3 allegations could cure the defect, the dismissal is WITH PREJUDICE. 4 The Clerk of the Court shall administratively terminate Mr. Colucci 5 as a party. 6 B. 7 Plaintiffs bring only a single federal claim, one for breach Federal Claim (Magnuson-Moss Warranty Act) 8 of written warranty under the federal Magnuson-Moss Warranty Act 9 ("MMWA"). Compl. ¶¶ 60-70. The MMWA creates a civil cause of United States District Court For the Northern District of California 10 action for consumers to enforce the terms of implied or express 11 warranties. 15 U.S.C. § 2310(d). As a threshold matter, the Court considers whether Plaintiffs 12 13 meet MMWA's jurisdictional requirements. Under § 2310(d)(1)(B), 14 private parties may bring a MMWA claim in federal district court. 15 Id. § 2310(d)(1)(B). 16 of a class, as this one is, a district court may not hear the claim 17 if "the number of named plaintiffs is less than one hundred." 18 § 2310(d)(3)(C). 19 be dismissed because, here, the number of named plaintiffs is only 20 two. 21 have found such prerequisites to be irrelevant when, as here, a 22 court has jurisdiction under the Class Action Fairness Act, 28 23 U.S.C. § 1332(d) ('CAFA')." 24 provide a citation to any of those "numerous" opinions or attempt 25 to demonstrate that this case satisfies CAFA's jurisdictional However, if the action is brought on behalf Defendant argues that Plaintiffs' MMWA claim must See Mot. at 10. Plaintiffs respond that "numerous courts Opp'n at 24. Though Plaintiffs do not 26 27 28 Id. more agreements requiring Ocwen to provide various services to plaintiff." Id. at 1201. In the case at bar, nothing suggests that Defendant entered any agreement with Ms. Sethavanish to provide anything to Mr. Colucci. 11 1 prerequisites, their conclusion is correct. 2 Honda Motor Co., Inc., 838 F. Supp. 2d 929, 954-55 (C.D. Cal. 2012) 3 (collecting cases holding that Congress's passage of CAFA 4 supplanted the jurisdictional requirements of the earlier-enacted 5 MMWA). 6 the MMWA, only the jurisdictional requisites of CAFA, and they have 7 done so here.5 Plaintiffs need not satisfy the numerosity requirements of Proceeding, then, to the merits of Plaintiffs' MMWA claim, the 8 9 See Keegan v. Am. Court concludes that the claim fails as a matter of law. United States District Court For the Northern District of California 10 Plaintiffs allege a breach of written warranty. 11 The MMWA defines a written warranty as follows: 12 Compl. ¶¶ 65-67. any written affirmation of fact or written promise made in connection with the sale of a consumer product by a supplier to a buyer which relates to the nature of the material or workmanship and affirms or promises that such material or workmanship is defect free or will meet a specified level of performance over a specified period of time. 13 14 15 16 17 15 U.S.C. § 2301(6)(A) (emphasis added). 18 language ("or") identifies two kinds of written warranties, the 19 first warranting a "defect free" product and the second warranting 20 a product that will "meet a specified level of performance over a 21 specified period of time." 22 a "defect free" warranty; specifically, they allege that the 23 nutrition bars' "All-Natural" representation constitutes "a written 24 promise that the ingredients in the Nutrition Bars were free of a The MMWA's disjunctive Plaintiffs allege only the first kind, 25 26 27 28 5 See 28 U.S.C. § 1332(d)(2) (provisions of CAFA giving district courts jurisdiction over class actions where any class member is diverse from any defendant and more than $5 million is in controversy); Compl. (alleging complete diversity of named parties and placing in controversy more than $5 million). 12 1 particular type of defect (i.e., that they were not synthetic or 2 artificial)." Compl. ¶ 66. The Court concludes that Plaintiffs' claim fails as a matter 3 4 of law. Plaintiffs allege that the actionable defect here is the 5 artificiality or synthetic nature of the ingredients in the 6 nutrition bars. 7 other cases. 8 WL 5458396, at *3 (N.D. Cal. June 14, 2012) ("[T]his Court is not 9 persuaded that being 'synthetic' or 'artificial' is a 'defect.'"); The identical argument has been rejected in many E.g., Larsen v. Trader Joe's Co., C 11-05188 SI, 2012 United States District Court For the Northern District of California 10 Dreyer's Grand Ice Cream, 2012 WL 2990766, at *2-4 (same, and 11 collecting cases). 12 persuasive and adopts it here. 13 persuasive authority that artificial or synthetic ingredients in 14 otherwise unobjectionable food products amount to an actionable 15 defect under the MMWA. 16 DISMISSED. 17 dismissal is WITH PREJUDICE.6 18 6 19 20 21 22 23 24 25 26 27 28 This Court finds the reasoning of those cases Plaintiffs fail to marshal any Accordingly, Plaintiffs' MMWA claim is Because amendment could not save the claim, the In Defendant's Notice of Removal, the only stated grounds for subject-matter jurisdiction are federal-question and supplemental jurisdiction. See NOR ¶¶ 6-8. Hence, the Court's dismissal of Plaintiffs' only federal claim raises the question of whether the Court should exercise its discretion to remand Plaintiffs' seven remaining state-law claims. The Court is plainly authorized to do so. See 28 U.S.C. § 1362(c); Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343 (1988). Cohill authorizes district courts to remand state law claims over which it exercises only supplemental jurisdiction after all federal claims have been dismissed. See Carlsbad Tech., Inc. v. HIF Bio, Inc., 556 U.S. 635, 637 (2009). Not only is remand authorized in such cases, but usually "the balance of factors to be considered [. . .] -- judicial economy, convenience, fairness, and comity -- will point toward" remand. Cohill, 484 U.S. at 350 n.7. The Court concludes, however, that this is not the usual case. As previously explained, this case satisfies CAFA's jurisdictional requirements. Further, because the Complaint alleges complete diversity between the parties and places more than $75,000 in controversy, Defendant could have removed on diversity grounds. Given the existence of grounds for subject-matter jurisdiction separate from those named in Defendant's Notice of 13 1 C. 1. 2 3 State Law Claims Preemption Defendant argues that Plaintiffs' state-law claims "stand[] as 4 an obstacle to federal law and policy, and so should be dismissed 5 as preempted." 6 Supremacy Clause of Article VI of the U.S. Constitution, which 7 provides that federal law is the "supreme law of the land." 8 this provision of the Constitution, "Congress has the power to 9 preempt state law." Mot. at 11. Preemption doctrine flows from the Under Crosby v. Nat'l Foreign Trade Council, 530 United States District Court For the Northern District of California 10 U.S. 363, 372 (2000). 11 intent is the "ultimate touchstone" of preemption analysis. 12 Altria Group, Inc. v. Good, 555 U.S. 70, 76 (2008). 13 intent to preempt state law may be found if the state law "stands 14 as an obstacle to the accomplishment and execution of the full 15 purposes and objectives of Congress." 16 432 F.3d 976, 981 (9th Cir. 2005) (quoting English v. Gen. Elec. 17 Co., 496 U.S. 72, 79 (1990)). 18 "conflict" preemption theory is the only one Defendant argues here. 19 Thus, in all preemption cases, congressional See Congressional Kroske v. U.S. Bank Corp., This "implied obstacle" or The Court notes, however, that the Ninth Circuit opinion on 20 which Defendant rests its argument was vacated during the pendency 21 of this motion. 22 F.3d 835 (9th Cir. 2011) vacated sub nom. Degelmann v. Advanced 23 Med. Optics Inc., 699 F.3d 1103 (9th Cir. 2012); see also Mot. at 24 11-12, Reply at 11-12 (arguing that Degelmann controls in this 25 case). See Degelmann v. Advanced Med. Optics, Inc., 659 In the absence of viable authority, the Court declines to 26 27 28 Removal, the Court declines to exercise its discretion to remand Plaintiffs' remaining state-law claims. Nothing would stop Defendant from simply removing again, and such a result would hardly be economical, convenient, or fair. 14 1 entertain Defendant's preemption argument at this time -- without, 2 however, any prejudice to Defendant's right to raise preemption 3 arguments in further proceedings before this Court. 2. 4 5 Plausibility and Particularity Federal Rule of Civil Procedure 8(a)(2) requires a plaintiff 6 to set forth "a short and plain statement of the claim showing that 7 the pleader is entitled to relief." 8 that Rule 8 requires that a complaint's well-pleaded allegations, 9 if taken as true, must "plausibly give rise to an entitlement to The Supreme Court has held Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (emphasis United States District Court For the Northern District of California 10 relief." 11 added). 12 specific task that requires the reviewing court to draw on its 13 judicial experience and common sense." 14 Determining the plausibility of allegations is "a context- Id. Rule 9(b) imposes a higher pleading standard on, inter alia, 15 claims that sound in fraud. 16 constituting fraud" must be "state[d] with particularity." 17 Civ. P. 9(b). 18 "must identify the who, what, when, where, and how of the 19 misconduct charged, as well as what is false or misleading about 20 the purportedly fraudulent statement, and why it is false." 21 Cafasso, U.S. ex rel. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 22 1047, 1055 (9th Cir. 2011) (internal quotation marks and brackets 23 omitted). 24 alleged generally." 25 For such claims, "the circumstances Fed. R. This "particularity" standard means that a plaintiff States of mind, however, including intent, "may be Fed. R. Civ. P. 9(b). In the case at bar, Defendant argues that the Court should 26 dismiss Plaintiffs' state-law claims as implausible or, to the 27 extent they sound in fraud, as lacking particularity. 28 21; Reply at 2-6. The argument is unavailing. 15 Mot. at 14- First, as to 1 plausibility, the Ninth Circuit has made plain that UCL, FAL, and 2 CLRA claims, like those asserted by Plaintiffs here, turn on the 3 application of a "reasonable consumer" standard. 4 Gerber Products Co., 552 F.3d 934, 938-40 (9th Cir. 2008). 5 Defendant's argument as to plausibility is, at bottom, an argument 6 that no reasonable consumer is likely be deceived by the labeling 7 of its nutrition bars. 8 courts have held, that issue is generally not amenable to 9 resolution on the pleadings because it involves issues of fact. See Williams v. But, as the Ninth Circuit and numerous United States District Court For the Northern District of California 10 See id.; see also, e.g., Dreyer's Grand, 2012 WL 2990766, at *11; 11 Hershey, 2012 WL 5471153, at *7; Vicuna v. Alexia Foods, Inc., C 12 11-6119 PJH, 2012 WL 1497507, at *2 (N.D. Cal. Apr. 27, 2012); 13 Astiana v. Ben & Jerry's Homemade, Inc., C 10-4387 PJH, 2011 WL 14 2111796, at *4 (N.D. Cal. May 26, 2011). 15 whether it would be reasonable for a consumer to believe the 16 nutrition bars' claim to be "All-Natural" and (2) whether the 17 nutrition bars' labels are "likely to deceive," are both factual 18 inquiries beyond the scope of the present inquiry into the "legal 19 sufficiency" of the Complaint. 20 Aerosols Ltd., Inc., 452 F. Supp. 2d 939, 942 (N.D. Cal. 2006) 21 (Rule 12(b)(6) motion tests sufficiency of pleading, not merits). The questions of (1) Cf. APL Co. Pte. Ltd. v. UK 22 The Court also rejects Defendant's arguments that the 23 Complaint's allegations of fraud are insufficiently particular. 24 Defendant argues first that Plaintiffs have failed to allege the 25 required element of "specific intent" with particularity. 26 argument fails because Rule 9(b) permits states of mind, including 27 intent, to be pled generally. 28 case from this District where the Court dismissed similar legal The Second, Defendant cites a recent 16 1 claims as having been pled with insufficient particularity, but the 2 case is distinguishable. 3 F.R.D. 618 (N.D. Cal. 2011). 4 allege how the challenged product -- a computer storage drive -- 5 "f[ell] short of its advertised qualities, e.g., actual versus 6 expected capacity of his drive and actual versus expected 7 performance speed." 8 appears to suggest that Plaintiffs, too, have not alleged with 9 particularity how the purchased nutrition bars fell short of their See Wang v. OCZ Tech. Group, Inc., 276 In Wang, the plaintiff failed to Id. at 628. By citing to this case, Defendant United States District Court For the Northern District of California 10 advertised qualities, in other words, how the advertising was 11 false. 12 bars were labeled "All-Natural" but in fact were not. 13 The suggestion is unavailing. Plaintiffs allege that the The Court is cognizant of Defendant's argument which purports 14 to show how the Complaint's "central premise" -- that the "All- 15 Natural" statement on the nutrition bars is deceptive because 16 federal regulations describe some of the bars' ingredients as 17 "synthetic" -- is false. 18 Defendant explains at length why "synthetic" ingredients are not in 19 fact unnatural, in the sense of being found "in nature." 20 points out that Plaintiffs admit that certain of the challenged 21 ingredients are naturally occurring compounds (for instance, 22 vitamins) or "common and normally expected to be in foods" like the 23 nutrition bars. 24 if not quite "natural," then not unnatural, and concludes that, 25 therefore, "there is no basis for concluding that the [nutrition] 26 bars are mislabeled." 27 fact, but factual matters are not amenable to resolution at the 28 pleading stage. See Mot. at 15-17; Reply at 3-4. Defendant Defendant asserts that this makes the ingredients, Defendant may be correct as a matter of 17 1 In a similar vein, Defendant submits a request for judicial 2 notice with six exhibits, the first five of which are screenshots 3 of the websites of purportedly health-conscious grocery stores. 4 ECF No. 27 ("RJN") Exs. 1-5. 5 stores mention ingredients which are also used in Defendant's 6 nutrition bars. 7 non-party grocery stores to "show[] the implausibility of any 8 reasonable consumer being deceived" by the "All-Natural" claim on 9 Defendant's packaging, since products containing the same In the screenshots, the grocery Defendant points to these representations by the United States District Court For the Northern District of California 10 ingredients are sold at the purportedly health-conscious grocery 11 stores. 12 untenable at the pleading stage. 13 assume the role of fact-finder in the guise of determining 14 plausibility. 15 probability requirement . . . ." 16 quotation marks omitted). 17 the Court to make a factual finding at the pleading stage, the RJN 18 is DENIED as to Exhibits 1 through 5. 19 Mot. at 18-19. The Court rejects this argument as The Court is not inclined to "The plausibility standard is not akin to a Iqbal, 556 U.S. at 678 (internal Because Defendant's RJN essentially asks Defendant presents no reason to dismiss Plaintiffs' state-law 20 claims as implausible or lacking particularity. 21 Court DENIES Defendant's motion to dismiss the state-law claims on 22 those grounds. 23 Defendant challenged Plaintiffs' common-law fraud, UCL, and FAL 24 claims (claims 2 through 6), those claims remain undisturbed. 3. 25 26 Accordingly, the Because those are the only grounds on which CLRA Notice Defendant argues that Plaintiffs' seventh claim, asserting 27 violations of the CLRA, must be dismissed as procedurally 28 deficient. Section 1782(a) of the CLRA requires that "[t]hirty 18 1 days or more prior to the commencement of an action for damages 2 pursuant to this title, the consumer shall . . . [n]otify the 3 person alleged to have" violated the CLRA "of the particular 4 alleged violations" and "[d]emand that the person correct, repair, 5 replace, or otherwise rectify" the violations. 6 1782(a). 7 this pre-suit notice provision because they sent a demand letter to 8 Defendant on August 30, 2011 but then filed a suit for damages in 9 California Superior Court on September 14, 2011. Cal. Civ. Code § Defendant argues that Plaintiffs failed to comply with See RJN Ex. 6 United States District Court For the Northern District of California 10 ("Aug. 30, 2011 Letter").7 11 letter had been timely, it failed to detail the CLRA violations 12 with sufficient particularity. 13 failure to provide proper notice requires dismissal with prejudice 14 of Plaintiffs' CLRA claim, because later notice and amendment 15 cannot, as a matter of law, cure the initial failure to provide 16 notice. Defendant argues that even if the Lastly, Defendant argues that Mot. at 23-24. Defendant's position is unavailing. 17 Plaintiffs sent their 18 CLRA notice letter on August 30, 2011, and filed the action now at 19 bar on April 26, 2012 -- nearly eight months later. 20 makes much of the fact that Plaintiffs are on their third complaint 21 in their second case against Defendant. 22 matters to the second, however, if it has some sort of preclusive Defendant The first case only 23 24 25 26 27 28 7 Defendant asks the Court to take judicial notice of the August 30, 2011 Letter. The Court declines to do so because it is neither a fact generally known nor is it the type of source whose accuracy "could not reasonably be questioned." Fed. R. Evid. 201. The Court will, however, consider the letter under the doctrine of incorporation by reference. Under that doctrine, it is sufficient that no party questions the authenticity of the document and that the document's contents are alleged in the complaint. Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005). Those conditions are satisfied here. See Compl. ¶¶ 45-47. 19 1 effect. 2 law or to the preclusion rules of the California state court where 3 the instant case was initially filed.8 4 gives no preclusive effect to the first, voluntarily dismissed 5 lawsuit. 6 commencement of the case now before this Court and thus was not 7 untimely for purposes of section 1782(a). Accordingly, the Court The CLRA notice letter was sent eight months before Defendant's argument that the letter lacked sufficient detail 8 9 Here, it does not, whether one looks to federal preclusion is similarly unavailing. Notice need only "give the manufacturer United States District Court For the Northern District of California 10 or vendor sufficient notice of alleged defects to permit 11 appropriate corrections or replacements." 12 Inc., 527 F. Supp. 2d 992, 1001-02 (N.D. Cal. 2007) (quoting 13 Outboard Marine Corp. v. Superior Court, 52 Cal. App. 3d 30, 40 14 (Cal. Ct. App. 1975)). 15 Plaintiffs' opposition, essentially concedes it by declining to 16 respond in the reply brief. 17 Letter, the Court concludes that it adequately notified Defendant Stickrath v. Globalstar, Defendant, challenged on this point in Having reviewed the August 30, 2011 18 8 19 20 21 22 23 24 25 26 27 28 As to federal law, "[c]laim preclusion, or res judicata, bars successive litigation of the very same claim following a final adjudication on the merits involving the same parties or their privies." Amadeo v. Principal Mut. Life Ins. Co., 290 F.3d 1152, 1159 (9th Cir. 2002) (internal quotation marks omitted). However, voluntary dismissals are not judgments "on the merits" unless specifically so stated or the claim has been voluntarily dismissed more than once. See Fed. R. Civ. P. 41(a)(1)(B). As to the preclusive effect of California law, under 28 U.S.C. § 1738, this Court "must give the same preclusive effect to a state court judgment as the state courts of that state would themselves give to that judgment," Noel v. Hall, 341 F.3d 1148, 1159 (9th Cir. 2003), and California courts do not give preclusive effect to voluntary dismissals without prejudice, see In re Estate of Redfield, 193 Cal. App. 4th 1526, 1534 (Cal. Ct. App. 2011) ("Application of the doctrine of res judicata requires an affirmative answer to" the question "Was there a final judgment on the merits?"); Syufy Enterprises v. City of Oakland, 104 Cal. App. 4th 869, 879 (Cal. Ct. App. 2002) ("By definition, a voluntary dismissal without prejudice is not a final judgment on the merits."). 20 1 of the alleged defect, which was the use of allegedly synthetic or 2 artificial ingredients in Defendant's nutrition bars. 4. 3 Restitution Based on Quasi-Contract Plaintiffs' eighth and final claim is pled in the alternative. 4 5 Compl. ¶¶ 114-16. Plaintiffs style this claim as one for 6 "Restitution Based On Quasi-Contract." 7 dismissal of this claim on two grounds. 8 that Plaintiffs have failed to plausibly plead that Defendant's 9 nutrition bars are not natural and hence have failed to plead the Id. Defendant seeks First, Defendant argues United States District Court For the Northern District of California 10 existence of a fraud that would make Defendant's enrichment 11 "unjust." 12 claim for unjust enrichment, even in the alternative, because they 13 have already sued in tort. Second, Defendant argues that Plaintiffs cannot bring a See Mot. at 24-25; Reply at 14-15. Defendant's first argument fails because it is predicated on 14 15 plausibility arguments that the Court already rejected. 16 Section III.C.2 supra. 17 presents a closer question. 18 the observation that "courts have inconsistently dealt" with 19 restitution claims. 20 understatement. 21 or restitution -- the terms are synonymous9 -- is not a cause of 22 action, but rather a remedy. 23 neither a claim nor a remedy, but a "principle." 24 unjust enrichment is indeed a cause of action, but one that may not 25 be pled alongside claims for breach of contract or tort. 26 9 27 28 See Defendant's second argument, however, Defendant begins its discussion with Mot. at 24. "Inconsistent" is an Some of the cases emphasize that unjust enrichment Some state that unjust enrichment is Some state that Yet Cf. McBride v. Boughton, 123 Cal. App. 4th 379, 387 (Cal. Ct. App. 2004) ("Unjust enrichment is not a cause of action . . . or even a remedy, but rather a general principle, underlying various legal doctrines and remedies[.] It is synonymous with restitution." (internal quotation marks and citations omitted)). 21 1 others come to the slightly different conclusion that these claims 2 may be pled alongside contract and tort claims, but only as an 3 alternative, "fallback" claim in the event that the contract or 4 tort claims fail. 5 entirely and simply analyze whether the plaintiff has adequately 6 pled the "elements" of the "claim." 7 appears to have turned on the words used in the caption to describe 8 the cause of action. Finally, some courts appear to elide the issue The outcome of some motions Having reviewed numerous discussions, this Court is persuaded 9 United States District Court For the Northern District of California 10 by, and adopts the reasoning of, the cases which hold that claims 11 for restitution or unjust enrichment may survive the pleading stage 12 when pled as an alternative avenue of relief, though the claims, as 13 alternatives, may not afford relief if other claims do. 14 Alexia Foods, 2012 WL 1497507, at *3; Trader Joe's, 2012 WL 15 5458396, at *7; Ben & Jerry's, 2011 WL 2111796, at *11. 16 Accordingly, the Court declines to dismiss Plaintiffs' alternative 17 "claim" for restitution based on quasi-contract. 18 extent that plaintiffs are ultimately able to prevail under a tort 19 theory, they will be precluded from also recovering under a claim 20 of unjust enrichment." E.g., However, "to the Trader Joe's, 2012 WL 5458396, at *7. 21 22 23 IV. CONCLUSION The Court ORDERS Plaintiff James Colucci dismissed from this 24 action for lack of standing. The Clerk shall administratively 25 terminate Mr. Colucci in ECF. 26 has standing to pursue the claims set forth in the Complaint with 27 respect to all twenty brands of Defendant ZonePerfect Nutrition 28 Company's nutrition bars identified in the Complaint. Plaintiff Kimberly S. Sethavanish 22 1 As to the merits, the Complaint's first claim for relief, 2 arising under the Magnuson-Moss Warranty Act, is DISMISSED WITH 3 PREJUDICE. 4 undisturbed. The other seven claims set out in the Complaint remain 5 6 IT IS SO ORDERED. 7 8 9 Dated: December 28, 2012 UNITED STATES DISTRICT JUDGE United States District Court For the Northern District of California 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 23

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